Norway’s $1.4 trillion wealth fund has excluded India’s top oil producer, Oil and Natural Gas Corporation, from its portfolio due to concerns over the company’s business in South Sudan, the fund said in a statement.

The world’s largest sovereign fund also excluded three Israeli firms, Elco, its subsidiary Electra and Ashtrom because of their links to Israeli settlements in the West Bank.

The companies were not immediately available for comment.

The exclusions are based on advice from the fund’s ethics watchdog and holdings were sold before any announcement was made.

Joint ventures in South Sudan

For ONGC, the primary concern was over its participation in two joint ventures in oil-dependent South Sudan, the watchdog said, a country where violent clashes between rival factions continue even after the end of a civil war in 2018.

“The council considers that ONGC through its operations has accepted a risk of contributing to serious abuse committed to enable oil production in the country,” said the watchdog, formally known as the Council on Ethics.

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“The council also takes into consideration that actors who are directly or indirectly responsible for grave violations are providing services to joint ventures and are responsible for security at the oil fields that the joint ventures operate,” it added.

Israeli settlements

In Israel, industrial group Elco and its construction subsidiary Electra were excluded because Electra builds roads in Israeli settlements in the West Bank, with Electra recently winning a tender for the construction of a major road project.

Along with a number of other countries, Norway considers the settlements a breach of international law, a view that Israel disputes. A 2020 United Nations report said it had found 112 companies with operations linked to the region, home to around 650,000 Israelis.

Meanwhile, Ashtrom lets industrial premises in these settlements which the council says “contributes to the continuation of an illegal state that their construction once initiated”.

The fund held a 0.38 per cent stake in ONGC at the end of 2020, its latest disclosure, valued at $60.6 million. It held a 0.1 per cent stake worth $1.35 million in Elco, a 0.38 per cent stake worth $7.8 million in Electra, and a 0.04 per cent stake worth $749,000 in Ashtrom.

Set up in 1996 to preserve Norway’s oil revenues for future generations, the fund holds around 1.4 per cent of globally listed shares and its decisions are often followed by other investors.